DiNapoli says state’s cash on hand at ‘historically low level’

The clock is now ticking down to March 31, at which time the state will have to cough up at least $577 million to fill the negative cash balance remaining at the end of December.

State Comptroller Tom DiNapoli’s latest “Cash Watch” said the general fund ended calendar year 2009 with its first month-to-month negative balance in recent history. On New Year’s Eve, DiNapoli’s office projected the General Fund’s cash balance at the end of December would be a negative $600 million.

But wait, there’s less: The state’s cash-on-hand — the balance in the state’s Short Term Investment Pool — was $1.2 billion, “a historically low level when compared with data from the last 15 years,” according to DiNapoli’s statement.

“… If revenue collections are lower than expected for January and February,” he said, “the state will have an even bigger problem to deal with in March. There’s an alarm bell ringing, and the state had better hear it.”

That message is not likely to cheer up school districts and localities hoping for the arrival of December’s delayed payments.

Here are the numbers from the Cash Watch:

State Funds Available Start of Business (amount of cash-on-hand to pay bills morning of Dec. 31): $506.4 million

Total Payments Made on Dec. 31: $640.5 million

Total State Funds Collected on Dec. 31 (tax, federal and other receipts from agencies received on Dec. 31: $1.4 billion

Final State Funds Available End of Business on Dec. 31 (Closing Balance): $1.2 Billion

More from the Comptroller’s release after the jump.

Actions Taken by State to Get through December:

$624.4 million in delayed payments for school aid, local aid and STAR (actions taken by the Governor);
$16 million transferred from Dormitory Authority State of New York (part of Deficit Reduction Plan);
$90 million from New York State Energy Research and Development Authority for the Regional Greenhouse Gas Initiative (part of DRP); and
$10 million transferred from the Environmental Protection Fund (part of DRP).

A Negative General Fund Balance
When the state’s General Fund has a negative cash balance, it puts the state in the position of borrowing from other state funds to pay its bills. Because the state’s General Fund ended December with negative $577 million balance, the state will need to make up the difference in January, February or March or take some other actions or it will end the year in the negative.

The General Fund is the major operating fund of the state. It is comprised of all non-dedicated revenues and includes the state’s major reserve funds. Money from the General Fund is used to pay for state operations and local assistance. The General Fund is a component of the state’s Short Term Investment Pool (STIP) or cash-on-hand. STIP is made up of All Governmental Funds (including the General Fund, state and federal special revenue funds, state and federal capital projects funds and debt service funds) and enterprise and internal service funds. These funds are invested temporarily until needed.

Last April when the state budget was adopted, it was anticipated that the state would face cash flow problems in the coming year. Therefore, a provision was included in the budget that allows the General Fund to borrow from other funds in STIP for a period not to exceed four months or until the end of the fiscal year, whichever is shorter, to meet its obligations in the event of a cash shortfall. Previously, temporary loans from other funds in STIP were allowed, but had to be paid back within the same month, preventing the General Fund from ending the month in the negative.

The State Comptroller’s office processes approximately 130,000 state payments daily. In State Fiscal Year 2008-09, it processed more than 34 million payments totaling approximately $103 billion.